Petron Q1 profit falls 28% on higher production costs

ABS-CBN News

MANILA, Philippines - Petron Corp., the country's largest oil refining and marketing company, reported its net income fell 28% to P2.5 billion in the first quarter of the year compared to last year's P3.4 billion, due to lower export volumes and higher production costs.

Petron saw its export volumes fall by 23% to 1.1 million barrels in the January to March period.

The benchmark Dubai crude oil averaged $116 per barrel in the first quarter of 2012 compared with $100 a barrel over the same period last year, which pushed its production costs higher.

Sales revenue still rose by 17% for the January to March period to P74.7 billion.

Petron said its overall market share increased to 38.5%, making it number 1 in the local oil industry. The company posted gains in sales volume in all major market segments, including Reseller, Industrial, LPG, and Lubricants. Total domestic volumes increased 8% to nearly 11 million barrels.

"With RMP-2 and the network expansion programs underway, we are confident that Petron will continue to grow and enhance its position as the leading oil refining and marketing company for many years to come," said Petron chairman and CEO Ramon S. Ang.

Ang was referring to the ambitious $2-billion Refinery Expansion Project, which was launched in early 2011 and aims to optimize the company’s refinery. Additional processing units are under construction, and the project is expected to go onstream in the fourth quarter of 2014. The project will allow the conversion of all fuel oil production into higher margin white products.

"These projects also underscore our commitment to put in place the necessary facilities needed to support our country’s future economic growth," he said.